Max Faldin, CEO/Founder Silverbird, has decades of experience building global IT & fintech businesses. After getting his MBA at Stanford, he co-founded Russia’s largest eCommerce company, Wikimart (dubbed “the Amazon of Russia” by Silicon Valley VCs) and raised $50M+ from Tiger Global. He then switched over to work with e-commerce companies in Asia, focusing mainly on payments as a CEO, investor, and advisor to numerous startups. He started Silverbird amidst the pandemic in London, in 2020, after noticing a major banking gap in international trade: millions of underserved SMEs around Africa, Middle East, and Asian regions and beyond were exposed to high fees, unfair rejections, unnecessary paperwork, and outdated regulations. The key pain point was high-value cross-border transactions – something international trade is all about. Silverbird makes cross-border banking business-friendly and international payments borderless, limitless, frictionless and affordable. It can onboard companies traditional banks can’t through the use of AI and data-driven KYC which analyzes publicly open customs and supply chain data to assess the risk-profile of a particular SME.
Max has decades of experience building global IT & fintech businesses. After getting his MBA at Stanford, he co-founded Russia's largest eCommerce company, Wikimart (dubbed ”the Amazon of Russia” by Silicon Valley VCs) and raised $50M+ from Tiger Global. He then switched over to work with e-commerce companies in Asia, focusing mainly on payments as a CEO, investor, and advisor to numerous startups. He started Silverbird amidst the pandemic in London, in 2020, after noticing a major banking gap in international trade: millions of underserved SMEs around Africa, Middle East, and Asian regions and beyond were exposed to high fees, unfair rejections, unnecessary paperwork, and outdated regulations. The key pain point was high-value cross-border transactions – something international trade is all about. Silverbird makes cross-border banking business-friendly and international payments borderless, limitless, frictionless and affordable. It can onboard companies traditional banks can't through the use of AI and data-driven KYC which analyzes publicly open customs and supply chain data to assess the risk-profile of a particular SME.
Transcription
Pemo: Welcome. So great to meet you finally, Max, and what an incredible entrepreneur startup history you have behind you and in front of you. I was wondering if you could talk a little bit about Silverbird, and I hear that you started that in the COVID crisis, so very interested in how that was starting that in London.
Max Faldin, Silverbird: Yeah, it was back in 2020 when I moved to the UK permanently with this vision of starting a FinTech company here. And back then, it was right before the COVID. I actually literally landed on the 16th of March and the first lockdown was at the 19th of March. And a lot of things were very unclear, how long it’s going to take, what’s the form and shape it’ll take, et cetera, et cetera. And I just didn’t think about that as a factor because I thought that I had a long road ahead of me, a few years, five at least, maybe 10.
And I didn’t think about COVID or lockdowns as something major back then. But one thing in particular changed is the way you hired people because until COVID, and I know that many people, and most of the people actually will agree with me, until COVID, it would be inappropriate to hire someone, especially at the senior position, without ever meeting in person. It was very orthodox to do. Some people did that, but it was very unusual. But somehow, during COVID first months it became normal.
Pemo: I think the investors said the same thing in Silicon Valley that they used to have to meet entrepreneurs, but during COVID, no.
Max Faldin, Silverbird: True. So, it became normal to me. And I made my first hire without actually, and I hired VP of operations without ever meet the person. And we actually met in-person probably like four months after we started working together, although we were both in London.
Pemo: Right. So, can you talk a little bit about Silverbird itself, the company, what you do? Is it a B2B?
Max Faldin, Silverbird: Yes.
Pemo: Great.
Max Faldin, Silverbird: Silverbird is totally a B2B. So, it’s very focused on its particular niche of international merchants, how we call them. It’s small exporters and importers around the globe. Think about people who ship rice from Kenya, or shoes from Vietnam, or refurbish electronics from China. All this stuff that people consume and other SMEs might buy as well. It’s in relatively large volume. So, our average transaction volume is €25,000. So, it’s wholesale transactions. And we specialize on this high-value cross-border transactions. We make it really smooth and really frictionless for our customers, because we have this KYB that shows us what they call business substance and compliance language.
And this way we can confirm that they’re real businesses and we can give comfort to ourselves and our banking partners that we can support transactions from ostensibly no name businesses sending thousands dollars across the border, but with only one limitation. We only touch physical goods because all the systems that we have, this KYB data-driven IML engine only works for physical good purchase.
Pemo: That probably protects you a little as well, because virtual transactions can be more difficult, correct?
Max Faldin, Silverbird: It does. It does. Because if we think about B2B cross-border payments, the least risky segment is actually physical good trade.
Pemo: Right, that makes sense. Yeah. And I hear you graduated from Stanford. I love Palo Alto. I think it’s the best place to live. I used to live on University Avenue before where I am now. But was wondering then you went back to Russia and actually built a business there. Do you want to talk about that business?
Max Faldin, Silverbird: Yeah, Palo Alto and particularly at university, [inaudible 00:05:21] and everything around it were very alluring, I would say very inviting to stay. And many people did so. But myself and my co-founder, another Stanford GSB classmate of mine, we had this dream to build eBay of Russia. We, between two years, while all the business students, they go to find their internship to start building their job search, that they will do during the second year, we didn’t do any of that. So, we flew to our country, developed this idea of eBay in Russia, started the company, assembled the team. And we were managing the team during the second year while we were still studying at the business school. And then, the day after graduation, we essentially flew back, and there was a company waiting for us there.
Pemo:Wow, that’s really impressive. Good work.
Max Faldin, Silverbird: Yeah.
Pemo: Is that company still going now?
Max Faldin, Silverbird: No, we sold it when Crimea happened, the previous Ukrainian crisis, because many investors… And we were building the company on the money of, first of all ourselves. We invested quite a bit ourselves, but then we raised about $50 million from Western investors. Probably one of the largest startup in Russia in this regard. We became one of the largest e-commerce players there. But investors wanted out when Crimea happened, so we had to sell the company rather prematurely, but we got something out of it. Definitely the experience as well. And the company was sold subsequently to another company, then this company merged and now it’s a part of some big player in Russia.
Pemo: Great. So, you’ve had a bit of experience then with wars, starting with the Crimea war, but also, with the current Ukraine war. How’s that affecting you and where are you in that drama?
Max Faldin, Silverbird: Yeah, first of all, I renounced my Russian citizenship day five or six after the war started. While I realized that the scope of the tragedy, and the extent to which I actually disagreed, not only with Putin and his associates, but with many people in Russia who supported this. I decided that I don’t want to be a part of it and don’t want to be part of the nation who invaded other country. A rather radical decision and is not supported by my family, for instance, but that’s my personal decision. So, I renounced the citizenship, and did it publicly on LinkedIn. And yeah, I’m a dual-citizenship. Before that, I’m Israeli as well, so I do know about wars.
Pemo: Yes. And is the current Gaza war, how has that affected you? Some atrocities came out of that.
Max Faldin, Silverbird :Yeah, it’s not, fortunately. I’m on the Israeli side obviously, and my mother lives in Israel, so I have family there. Yeah, I commute to Israel frequently. I went there a couple of times since the latest phase when Gaza conflict started. But it’s very sad because-
Pemo: Yeah, tragic, isn’t it?
Max Faldin, Silverbird: It’s very sad. And my sense that it’s tragic, definitely. Especially given the number of people who are dead, who lost their loved ones. And it seems to me that this thing is going to be worse before it gets better.
Pemo: Yeah, it appears that way. Tell me, how’s the climate in London as regards investment and startups? Are things booming or not? I know we’ve had massive layoffs in Silicon Valley, San Francisco Bay Area, so I was wondering how that is there.
Max Faldin, Silverbird: Climate is not booming at all because obviously this drastic turn in May, June, 2022 that happened and affected everybody including Silverbird. When BC went from this [inaudible 00:10:39] investment, I would say spreading money across all the startups to [inaudible 00:10:46] non-investment, all the money. Now, they have this largest, largest ever reserves and they keep sitting on it. And I’m just wondering how long, because they keep charging their management fees, and I think it’s this year it might turn. Obviously, not to come back to this 2022 or 2021 phase, but we will see some improvement at least this year with interest rates going down, hopefully. So that’s my process.
But to your other point about layoffs, I’ll be very cautious about over-indexing that because yes, Twitter layoff, a lot of people, half of the staff, but that was driven by the acquisition. Google and Facebook in particular, although the numbers are high, if you compare that to the number of people they hired in the previous two years leading to the layoffs, they haven’t actually fired all of them. So, they’re still a fraction of the number of people they grew over the last two or three years. So they overhired first and then they corrected themselves after that.
Pemo: Yeah, I agree. And how are you seeing AI and how is that fitting in your business?
Max Faldin, Silverbird: AI is a big bet in our business. Although we don’t position ourselves as AI company, I think it’s a stretch, but we use AI a lot in compliance because we are data-driven compliance company and we use it in very practical things like for instance, extracting data from PDF and normalizing and standardizing it and summarizing packages we receive from our customers, extracting data from bank statements. Again, normalizing and standardizing it. And doing all the stuff that AI is so good at at the moment. I think as AI as a technology and product keep developing, we will keep our close eye on it and we will also evolve our business model accordingly.
Pemo: Great. Well, look, really appreciated connecting with you and getting all this feedback. You’ve certainly got a brilliant history and I wish you all the best with Silverbird and look forward to hearing how you go down the line.
Max Faldin, Silverbird: Yes, great to meet you with you. Thank you.
Pemo: Okay. Thanks, Max.
Max Faldin, Silverbird: Thanks.
